NOTE: To change the image on this slide, select the picture and delete it. Then click the Pictures icon in the placeholder to insert your own image. SAN BERNARDINO COMMUNITY COLLEGE DISTRICT Budget Study Session May 29, 2014

Fiscal Year GFOA Distinguished Budget Award 2May 29, 2014

Agenda  Introduction  Review of Fiscal Year  Fiscal Year Budget Components  Fiscal Year Tentative Budget  Seven-Year Financial Plan  Next Steps 3May 29, 2014

INTRODUCTION 4May 29, 2014

Budget is a Team Effort Budget Development Board of Trustees Chancellor’s Cabinet District Budget Committee College’s Budget Committees S.B. Valley College Crafton Hills College KVCREDCT Human Resources TESS Police Department Fiscal Services 5May 29, 2014

Agenda Introduction  Review of Fiscal Year  Fiscal Year Budget Components  Fiscal Year Tentative Budget  Seven-Year Financial Plan  Next Steps 6May 29, 2014

REVIEW OF FISCAL YEAR May 29, 2014

Board Directives for Fiscal Year  Balance the budget without the use of Fund Balance (Reserve) while maintaining a minimum Fund Balance level of 15% (State minimum is 5%).  Allocate funding through the district resource allocation model to support SBVC and CHC as comprehensive community colleges through transfer education, career/ technical education, and basic skills education.  Increase student success and access.  Identify new or reallocated funds for strategic initiatives.  Maintain “selective hiring freeze” to provide strategic funding of priority needs.  Reorganize and reallocate resources where possible to increase efficiency and improve services.  Reduce expenditures that are not mission-critical.  Invest in projects that enhance the efficiency of district and college operations.  Continue the Measure M bond program based on facilities master plans.  Continue to develop external funding streams including grants, scholarships, and fundraising.  Maintain full funding for step and column increases.  Maintain 50% law ratios in staffing plans.  Honor collective bargaining agreements. 8May 29, 2014

Review of Fiscal Year Accomplishments  Achieved all Board Directives  Funding for Student Success Initiatives  Resource Allocation Model Guidelines  GASB 43/45 Payout  College Brain Trust Resource Allocation Report  College Brain Trust Staffing Plan Report  First Salary Increase in Seven Years  Seven-Year Financial Plan  Funding for 540 additional Credit FTES 9May 29, 2014

Review of Fiscal Year Assumptions  Forecast from Various Legislative Groups  Legislative Analyst Office (LAO)  Community College League (League)  School Services of California  State Chancellor’s Office  Association of California Community College Administrators (ACCCA)  Association of Chief Business Officials (ACBO)  Advance Apportionment Projected 2.26% Funded Growth  Period 1 Funded Credit FTES at 2.76%  Current Funded FTES Growth Assumption is 3%  Period 1 State Deficit Factor at 4.09%  Target 5.9% (Unused Growth from other Districts Could Still be Available)  Latest indication is that Fiscal Years through Could Get Additional Funding 10May 29, 2014

Review of Fiscal Year  Growth and COLA Summary CATEGORYFY FY RecalculationCurrent BudgetPeriod 1 (Actual)Period 2 (Projected) FTES Growth Target14, % Total FTES13,24114, % 14, % 14, % Funded FTES13,24113, % 13, % 13, % Unfunded FTES % % % State Deficit Factor0.22%0.00%4.09%0% COLA0.00%1.57% 11May 29, 2014

Funded and Unfunded Credit FTES by Fiscal Year – Valley College Shaded Area is Unfunded FTES 12 Unfunded FTES May 29, 2014

Funded and Unfunded Credit FTES by Fiscal Year – Crafton Hills Shaded Area is Unfunded FTES 13 Unfunded FTES May 29, 2014

Funded and Unfunded Credit FTES by Fiscal Year – District Total Shaded Area is Unfunded FTES 14 Unfunded FTES1, May 29, 2014

Credit FTES Recovery Based on FY (Increased ACCESS) 15May 29, 2014 Actual FTES15,18913,73613,24114,500

Fiscal Year Projected Actuals for the Unrestricted General Fund 16May 29, 2014

Agenda Introduction Review of Fiscal Year  Fiscal Year Budget Components  Fiscal Year Tentative Budget  Seven-Year Financial Plan  Next Steps 17May 29, 2014

FISCAL YEAR BUDGET COMPONENTS 18May 29, 2014

Fiscal Year Budget Components and Guidance Board Directives Budget Guidelines Program Review Tentative State Budget Forecast from Various Legislative Groups May Revision State Budget Budget Assumptions 19May 29, 2014

Board Directives as Approved on January 16, 2014  Balance the budget without the use of Fund Balance (Reserve) while maintaining a minimum Fund Balance level of 15% (State minimum is 5%).  Allocate funding through the district resource allocation model to support SBVC and CHC as comprehensive community colleges through transfer education, career/ technical education, and basic skills education.  Increase student success and access.  Identify new or reallocated funds for strategic initiatives.  Maintain “selective hiring freeze” to provide strategic funding of priority needs.  Reorganize and reallocate resources where possible to increase efficiency and improve services.  Reduce expenditures that are not mission-critical.  Invest in projects that enhance the efficiency of district and college operations.  Continue the Measure M bond program based on facilities master plans.  Continue to develop external funding streams including grants, scholarships, and fundraising.  Maintain full funding for step and column increases.  Maintain 50% law ratios in staffing plans.  Honor collective bargaining agreements.  Continue toward the sustainability of KVCR (New). 20May 29, 2014

Resource Allocation Model Guidelines  As Proposed by District Budget Committee 21 May 29, 2014

Other Components  Program Review  Forecast from Various Legislative Groups  Legislative Analyst Office (LAO)  Community College League (League)  School Services of California  State Chancellor’s Office  Association of California Community College Administrators (ACCCA)  Association of Chief Business Officials (ACBO)  Tentative State Budget  May Revision Update State Budget 22May 29, 2014

State Budget - May Revision  Growth and COLA Summary  $50M added to Economic and Workforce Development (EWD) as one-time basis  $42.4M added to offset decreases in local property taxes and fee revenue  $6M added for technology infrastructure ($1.4M one-time, $4.6M ongoing)  $27M decreased for deferred maintenance and instructional equipment  All funds for deferred maintenance  Eliminate the local match CategoryGovernor ‘s Proposed Budget (Jan 2014) Governor Proposed Revised Budget (May Revision) Growth3%2.75% COLA.86%.85% 23May 29, 2014

State Budget - May Revision (continued)  Pay down deferrals by  CalSTRS proposal to fully pay the $74 billion in unfunded CalSTRS over the next 30 years  Increase employer contributions by 1.25% for FY and annual increases of 1.61% thereafter until the rate reaches 19.1% in the fiscal year  Proposal to increase COLA to 1.7% to cover costs  Rainy Day Fund 24May 29, 2014

Agenda Introduction Review of Fiscal Year Fiscal Year Budget Components  Fiscal Year Tentative Budget  Seven-Year Financial Plan  Next Steps 25May 29, 2014

FISCAL YEAR TENTATIVE BUDGET 26May 29, 2014

Budget is a Team Effort Budget Development Board of Trustees Chancellor’s Cabinet District Budget Committee College’s Budget Committees S.B. Valley College Crafton Hills College KVCREDCT Human Resources TESS Police Department Fiscal Services 27May 29, 2014

Fiscal Year Budget Components Board Directives Budget Guidelines Program Review Tentative State Budget Forecast from Various Groups May Revised State Budget Budget Assumptions 28May 29, 2014

29May 29, 2014

Resource Allocation Model Assumptions  As Proposed by District Budget Committee (DBC)  These assumptions are fine tuned as further information is received by Fiscal Services  Increased Participation by DBC  Increased Transparency 30May 29, 2014

Summary of FTES Assumptions for FY Tentative Budget  Reduce Unfunded Credit FTES From to  0% Growth Target  2.75% Funded Growth  Projected FY Unfunded FTES Cost = $1,060 per FTES  FY Funded FTES Allocation is based on FY P2  Valley College = 68.62%  Crafton Hills = 31.38%  Continue Focus on Student ACCESS and Success  Focus on Increased Productivity 31May 29, 2014

Historical FTES with Goal for FY for Valley College Shaded Area is Unfunded FTES 32 Unfunded FTES May 29, 2014

Historical FTES with Goal for FY for Crafton Hills Shaded Area is Unfunded FTES 33 Unfunded FTES May 29, 2014

Historical FTES with Goal for FY for District Total Shaded Area is Unfunded FTES 34 Unfunded FTES1, May 29, 2014

Other Assumptions for FY Tentative Budget .86% COLA for State Revenues  4% Salary Increases for FY and FY  Maintain “selective hiring freeze” to provide strategic funding of priority needs  Allocation of Assessments is Valley at 68.62% & Crafton at 31.38%  KVCR Subsidy Paid From Districtwide Reserves  Reduce EDCT College Assessment by 20%  Unfunded FTES Paid From College Reserves 35May 29, 2014

36 Fiscal Year Tentative Budget for the Unrestricted General Fund May 29, 2014

Agenda Introduction Review of Fiscal Year Fiscal Year Budget Components Fiscal Year Tentative Budget  Seven-Year Financial Plan  Next Steps 37May 29, 2014

SEVEN-YEAR FINANCIAL PLAN 38May 29, 2014

Reasons to Develop Multi-Year Financial Plans  Standard Best Fiscal Practice  Required by Accreditation  Required by Government Finance Officers Association (GFOA)  Recommended by College Brain Trust  A Tool for Monitoring Budget Performance and Ending Fund Balance Forecasts 39May 29, 2014

Assumptions for Seven-Year Financial Plan  Maintain Fund Balance at 15% .86% Annual COLA for State Revenues  1.5% Annual Increase for Steps & Columns  11% Annual Increase for Health and Welfare Benefits .86% Annual Inflation for Object Codes 4000’s-6000’s  4000’s – Supplies (Library Books, Classroom Supplies, etc.)  5000’s – Other Expenses & Services (Consulting, Utilities, etc.)  6000’s – Capital Outlay (Equipment, etc.)  4% Salary Increases for FY and FY May 29, 2014

Credit FTES Assumptions for Seven-Year Financial Plan  0% Growth Target for FY 14-15; 2% thereafter  2.75% Funded Growth for FY 14-15; 2% thereafter  FY Funded FTES Allocation is based on FY P2  Valley at 68.62%  Crafton at 31.38%  No Cost for Additional Adjunct Hours in FY 14-15; 2% thereafter  Unfunded FTES Will be Paid from College Reserves as Applicable  Focus on Productivity 41May 29, 2014

Seven-Year Financial Plan for the Unrestricted General Fund 42 May 29, 2014

Projected Ending Fund Balance for the Unrestricted General Fund Note:  Ending Fund Balance is an accounting term that may not reflect the actual cash on hand at any given time. 43May 29, 2014

Agenda Introduction Review of Fiscal Year Fiscal Year Budget Components Fiscal Year Tentative Budget Seven-Year Financial Plan  Next Steps 44May 29, 2014

NEXT STEPS 45May 29, 2014

Next Steps  Fall 2014  Districtwide Long Range Enrollment Planning  College Brain Trust Enrollment Planning (June Board)  Formation of a Taskforce to Create a Districtwide Enrollment Plan  June 2014  Present Tentative Budget to Board for Adoption  State Chancellor’s Office Issues Period 2 Report (P2)  July 2014  California Budget Enacted  August 2014  State Chancellor’s Office Releases Fiscal Year Advance Apportionment  September 2014  Present Final Budget to Board for Adoption 46May 29, 2014

Priorities and Focus for Fiscal Year  Staffing, Organization and Salary Alignments  Enrollment Management  Increase Efficiencies  Planning Processes and Systems  Budget  Position Control  Budget Request & Approval Processes  Support Strategic Plan 1.Student Success 2.Enrollment and Access 3.Partnerships of Strategic Importance 4.District Operational Systems 47May 29, 2014

Budget is a Team Effort Budget Development Board of Trustees Chancellor’s Cabinet District Budget Committee College’s Budget Committees S.B. Valley College Crafton Hills College KVCREDCT Human Resources TESS Police Department Fiscal Services 48May 29, 2014

NOTE: To change the image on this slide, select the picture and delete it. Then click the Pictures icon in the placeholder to insert your own image. QUESTIONS Budget Study Session May 29, 2014